Guardia Pty Ltd produces patio heaters for household use. The following information has been gathered so that a production budget, a direct materials budget and a direct labour budget for part of 2017 can be prepared.The materials and labour requirements per unit are as follows: Quantity CostStainless steelGas cylinderMoulding and weldingPowder coating5 kilograms12 hours0.5 hour $12 per kilogram$18$22 per hour$18 per hourManagement prefers a finished goods ending inventory for each quarter that equals 25% of expected sales for the next quarter. Also, the ending inventory balance of direct materials should equal 25% of the next quarter's production requirements. The inventory balances on1 January 2017 are forecast as:Stainless steelGas cylindersPatio Heaters250 kilograms103500The forecast quarterly sales in units are:March 2017 June 2017 September 2017 December 2017 950 1 120 480 212
RequiredA. Prepare a quarterly production budget, in units only, for the March, June and September quarters of 2017.
B. Prepare a direct materials budget for the March and June quarters of 2017 in both units and dollars (rounded to full dollars).
C. Prepare a direct labour budget (hours and dollars) for the March and June quarters of 2017.